IMO an application by Horne and Vrsecky - [2010] VSC 657

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT LIST E

No. S CI 2010 06238

STIRLING LINDLEY HORNE and
PETR VRSECKY (in their capacities as joint and several administrators of Australian Property Custodian Holdings Limited) (ACN 095 474 436) (Administrators appointed) (Receivers and Managers appointed)

Plaintiffs

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JUDGE:	GARDINER AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	18 November 2010
DATE OF JUDGMENT:	26 November 2010
CASE MAY BE CITED AS:	IMO an application by Horne and Vrsecky
MEDIUM NEUTRAL CITATION:	[2010] VSC 657

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EXTERNAL ADMINISTRATION – Application under s 439A(6) and s 447A of the Corporations Act2001 (Cth) for extensions of convening period as fixed by s 439A(5) of the Corporations Act2001 (Cth) – Twenty companies as part of group placed into administration – Long extension of convening periods sought – Applications for extensions granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Dr A. Trichardt	Cornwall Stodart Lawyers

HIS HONOUR:

The plaintiffs make application under s 439A(6) and s 447A of the Corporations Act 2001 by an originating process filed 17 November 2010 for extensions of the convening periods as fixed by s 439A(5) of the Corporations Act 2001 for each of the second meeting of creditors of the plaintiff companies identified in the schedule to the originating process.

On 18 November 2010, I made orders extending the convening periods for each of the 20 plaintiff companies identified in the schedule to the originating process and indicated that I would subsequently publish my reasons for doing so at a later date which I now do.

By an order of Ferguson J made on 18 November 2010, the Originating Process was referred for hearing by an Associate Judge pursuant to rule 77.05 of the Supreme Court (General Civil Procedure) Rules 2005 and if required, also pursuant to rule 16.1(3) of the Supreme Court (Corporations) Rules 2003.

The application is supported by an affidavit of Stirling Lindley Horne sworn 17 November 2010.

On 18 and 19 October 2010, Mr Horne and Mr Petr Vrsecky were appointed as joint and several administrators of Australian Property Custodian Holdings Limited (“APCHL”) and 19 other companies. All of those other companies, save one (APCH Administrators Pty Ltd), are subsidiaries, or subsidiaries of subsidiaries, of APCHL in its capacity as responsible entity of the Prime Retirement and Aged Care Property Trust (“the Trust”). APCHL also carries on business in its own right.

The appointment of Messrs Horne and Vrsecky as administrators of APCHL was validated by an order of Sifris J on 29 October 2010. That order is presently the subject of an application for leave to appeal returnable in the Court of Appeal on 13 December 2010.

Because of the retrospective validation of the appointment in relation to APCHL, the convening period under the terms of s 439A(5) for that company ended on 15 November 2010.

There was no attack on the validity of the appointment of Messrs Horne and Vrsecky as administrators to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] VSC 657
Decision Date: 26 November 2010

CaseChat Overview and Summary

The case involved an application by Horne and Vrsecky, seeking extensions to the convening periods for meetings of creditors and members under sections 439A(6) and 447A of the Corporations Act 2001 (Cth). The twenty companies, which formed part of a group, had been placed into external administration. The applicants sought a substantial extension to the convening periods as mandated by section 439A(5) of the Corporations Act. The primary issue before the court was whether the applications for these extensions were justified, given the complexities and the circumstances surrounding the administration of the group of companies.

The court considered various factors in determining whether to grant the extensions, including the necessity for the extensions due to the large number of companies involved, the potential impact on the creditors and members, and the overall administration process. The court recognised that the complexity of the administration and the need to ensure proper and timely communication with the affected parties warranted the granting of extensions. It was also noted that the administrators had acted diligently and in the best interests of the companies and their stakeholders. Based on these considerations, the court decided to grant the applications for extensions.

The court's decision acknowledged the challenges presented by the administration of a large group of companies and the importance of allowing adequate time for the convening of meetings. The court's ruling reflected a balanced approach, recognising the need for efficiency in the administration process while also ensuring that the rights of creditors and members were properly protected. The final orders granted the extensions sought by the applicants, enabling the administrators to proceed with the convening of the meetings under the extended timeframes.

Orders